Pacific Shipping Trust (PST), one of Singapore's three shipping trusts and the first to launch in 2006, has called it a day. Pacific International Lines (PIL), the trust's sponsor has made a buy-out offer at US$0.43, with the interntion of delisting the trust.

PST cited the desire for greater operating flexibility, high compliance costs of listing and low trading liquidity as reasons for the move. PIL, the offeror, intends to "streamline the group structure of

PST and its subsidiaries". While it seems likely this will be the eventual outcome, PIL maintains that this "may involve" winding up PST, buying over the fleet and the redeployment of key staff back to PIL.

The two other shipping trusts have had loan-to-value covenant problems with the banks as well as have suffered from funding issues at the depths of the Asian Financial Crisis. PST may be making the move early to forestall any similar problems as the global economic situation continues to deteriorate. Meanwhile the resultant need during that time to conserve cash by decreasing distribution payouts upset unitholders and exacerbated the problem of low liquidity which has continued to plague all three trusts. It will be interesting to see how long more the other two, First Ship Lease Trust and Rickmers Maritime Trust, will be able to hold out.

PST has a current fleet of 12 container vessels, and just took delivery of two capesize bulkers in the weeks before the proposal to delist was announced. Its sponsor, PIL, is Singapore's No. 2 line and the 19th largest in the world.